Subscribe Feed (RSS)The earlier a person can start establishing a good clean credit history the better. One of the easiest ways to start establishing good credit is with the responsible use of a credit card. There’s not better time to get started than while you are in college.
The benefits of good credit are many. Having good credit makes it easier to get loans for cars and homes. potential employers often will check applicants credit history to see how responsible they are with their financial obligations. Landlords require credit checks prior to approving applicants. Good credit can lower your insurance rates. Utility companies often check credit when they have new customers apply for service. So having good credit can have an impact on a variety of different things.
Making your credit card payment on time every time is the most important factor in building good credit. Making your payments late or not at all is the quickest route to lousy credit.
Making sure to never go above the credit limit on the card is also important. Once you go over the limit on the card the credit card company is going to raise the interest rate on the card without even letting you know..
Next you should always pay off the balance on the credit card completely every month. Use your card wisely, don’t spend on the card unless you have the money in the bank to pay it off. Paying the card off every month has a huge positive affect on your credit score.
Cash advances are a recipe for disaster as well. Granted unforeseen expenditures come up but relying on credit cards to to make ends meet is really a dead end that will catch up to you. Sooner or later your going to have face your debt so don’t let it get out of hand. Interest rates on cash advances can be pretty hefty so don’t use them unless you have the money to pay it off.
Balance transfers from one card to another can be a never ending cycle. The lure is that you can transfer a balance from a higher interest rate card to one that has a low introductory rate. It’s not a bad strategy to lower your interest charges but don’t get caught in that never ending cycle.
Your college years are the perfect time to start establishing credit as long as you are smart about it. Don’t go crazy spending money that you don’t have buying things that you don’t really need and can’t afford otherwise.
Tags: finance
